What’s At Stake For Medicare Beneficiaries In Supreme Court Decision

If the Supreme Court strikes down the health law, 49 million Medicare beneficiaries could lose a variety of benefits that have already kicked in. They include:

Prescription savings. Beneficiaries get discounts of 50 percent on brand-name drugs when they are in the so-called doughnut hole, or coverage gap where beneficiaries have no insurance help with the cost of their medications. The law phases out the gap by 2020.

Preventive services. Beneficiaries in the traditional, government-run Medicare program receive preventive services such as mammograms and colonoscopies with no co-payment or deductible.

Wellness visits. Enrollees can see their doctor once a year to assess their health status and risks for disease, and develop a personalized prevention plan, with no co-payment or deductible.

On average, seniors and disabled people covered by Medicare saved $604 in 2011 on prescription drugs, and more than 26 million saw their doctors for wellness visits or got preventive services. If the court strikes down only the law’s individual mandate, which requires most people to buy insurance, nearly all of the health law’s Medicare changes will remain intact.

The law also extended the life of Medicare’s Hospital Insurance Trust Fund (Part A) to 2024. Otherwise, the trust fund is projected to become insolvent earlier, around 2017, which could pressure lawmakers in Washington to be tough on Medicare when they negotiate a deficit reduction deal after the election.

The law delayed the fund’s insolvency and paid for new benefits by reducing federal spending in other areas of Medicare, increasing the cost of coverage for higher-income beneficiaries and adding what the Obama administration says are efficiencies to the system. After the give and take, Medicare will get about $428 billion less from the federal government between 2010 and 2019. Federal spending on Medicare will still rise, but less quickly.

Republicans argue that these reductions harm seniors by shifting money from Medicare to help expand insurance coverage to the under-65 population.

One of the biggest savings came from reduced payments to hospitals and other medical providers. If the law disappears, higher payments will be restored, but medical providers would also likely have more uninsured patients.

The law reduced payments to Medicare Advantage plans – mostly managed care HMOs and PPOs – that cover about one quarter of beneficiaries. Medicare has been spending more for beneficiaries in these private plans than it has been for those in the traditional program, and the idea was to equalize those payments.

For the longer term, the health law created the Independent Payment Advisory Board to propose spending reductions if Medicare grows too quickly.

If the health law goes, so will the funding and authorization for a handful of Medicare experiments aimed at reducing health care costs by better organizing and improving the quality of care. The law includes a pilot project to bundle payments to medical providers so that a single check would cover an episode of care, such as a hip replacement. Other programs are set to test value-based purchasing for medical providers and accountable care organizations.

Health care experts had hoped that these experiments would both save money in Medicare and encourage similar steps in the private health care delivery system.